Question

* Format Painter BIU - ab X, X A- Clipboard Font Lavage Rapide is a Canadian company that owns and operates a large automatic car w. Fixed Cost Cost per per Month Car Washed Cleaning supplies Electricity $ 1,200 $ 0.15 Maintenance Wages and salarie $ 5,000 Depreciation 6,000 Rent $ 8,000 Administrative expenses. $ 4,000 0.2012 100 For example, electricity costs are $1,200 per month plus $0.15 per car washed. The com The actual operating results for August appear below. Lavage Rapide Income Statement ***For the Month Ended August 3 Actual Care Washed 0 Revenue Expenses cleaning supplies a 0009 00 0000 laolalala a . Stricity Maintenance Wages and sala: Depreciation Rent Administrative expenses Total expense Net operating income 8,500 6,000 8,000 14,950 39,940 $ 3,140 Required

Answer 1

	Actual	Revenue/Spending Variance		Flexible
Cars washed	8,800			8,800
Revenue	$43,080	$40	U	$43,120
Expenses:
Cleaning supplies	$7,560	$520	U	$7,040
Electricity	$2,670	$150	U	$2,520
Maintenance	$2,260	$500	U	$1,760
Wages and salaries	$8,500	$860	U	$7,640
Depreciation	$6,000	$0	None	$6,000
Rent	$8,000	$0	None	$8,000
Administrative expenses	$4,950	$70	U	$4,880
Total expenses	$39,940	$2,100	U	$37,840
Net operating income	$3,140	$2,140	U	$5,280

Revenue or spending variance = Actual budget - Flexible budget

If Actual revenue and Net operating income is more than the flexible then it is Favorable (F). Otherwise Unfavorabel (U)

If Actual Expenses are less than the flexible then it is Favorable (F). Otherwise Unfavorable (U).

Calculations:

Flexible budget

Flexible budget (8,800 cars washed)
	Cars washed	x	Variable unit cost	=	Total variable cost (i)	Fixed cost (ii)	Total (i) + (ii)
Revenue	8,800		$4.90	=	$43,120		$43,120
Cleaning supplies	8,800	x	$0.80	=	$7,040		$7,040
Electricity	8,800	x	$0.15	=	$1,320	$1,200	$2,520
Maintenance	8,800	x	$0.20	=	$1,760		$1,760
Wages and salaries	8,800	x	$0.30	=	$2,640	$5,000	$7,640
Depreciation	8,800	x				$6,000	$6,000
Rent	8,800	x				$8,000	$8,000
Administrative expenses	8,800	x	$0.10	=	$880	$4,000	$4,880